DOJ's $313M correctional facility contract with Cornell Companies, Inc. awarded in 2004, ending in 2016

Contract Overview

Contract Amount: $312,952,413 ($313.0M)

Contractor: Cornell Companies, Inc.

Awarding Agency: Department of Justice

Start Date: 2004-09-24

End Date: 2016-04-13

Contract Duration: 4,219 days

Daily Burn Rate: $74.2K/day

Competition Type: FULL AND OPEN COMPETITION

Number of Offers Received: 3

Pricing Type: FIXED PRICE AWARD FEE

Sector: Other

Official Description: CONTRACTOR OWNED AND OPERATED CORRECTIONAL FACILITY

Place of Performance

Location: PHILIPSBURG, CENTRE County, PENNSYLVANIA, 16866

State: Pennsylvania Government Spending

Plain-Language Summary

Department of Justice obligated $313.0 million to CORNELL COMPANIES, INC. for work described as: CONTRACTOR OWNED AND OPERATED CORRECTIONAL FACILITY Key points: 1. The contract value of $313 million over its lifespan suggests a significant investment in correctional facility operations. 2. Cornell Companies, Inc. was the sole contractor, indicating a single-source or limited competition scenario for this specific facility. 3. The contract duration of over 11 years points to long-term operational needs and potential for contractor lock-in. 4. Awarded under 'FULL AND OPEN COMPETITION', the initial procurement process aimed for broad participation. 5. The 'FIXED PRICE AWARD FEE' contract type suggests a base price with incentives for performance, aiming to balance cost control with quality. 6. The contract's primary function was 'Facilities Support Services', a critical component of correctional operations. 7. The geographic location in Pennsylvania (PA) specifies the operational area for this facility. 8. The absence of small business set-aside flags indicates the primary contractor was not a small business, and subcontracting opportunities may be limited.

Value Assessment

Rating: fair

The total award value of $313 million over approximately 11.5 years averages to about $27 million per year. Without specific performance metrics or comparable contracts for similar facilities, a precise value-for-money assessment is challenging. However, the fixed-price award fee structure implies an attempt to manage costs while incentivizing performance. Benchmarking against industry standards for correctional facility management would be necessary for a more definitive evaluation of pricing and value.

Cost Per Unit: N/A

Competition Analysis

Competition Level: full-and-open

The contract was awarded under 'FULL AND OPEN COMPETITION', suggesting that multiple vendors were initially invited to bid. However, the data does not specify the number of bids received or the extent of competition during the bidding process. The fact that Cornell Companies, Inc. was the sole awardee for this specific contract implies that they were selected from the competitive pool.

Taxpayer Impact: A full and open competition, in principle, should lead to better price discovery and potentially lower costs for taxpayers by encouraging multiple vendors to offer competitive bids.

Public Impact

The primary beneficiaries are the inmates housed within the correctional facility, who receive services and a managed environment. The contract delivers essential facilities support services, including maintenance, operations, and potentially staffing for the correctional facility. The geographic impact is localized to Pennsylvania, where the correctional facility is situated. The contract supports jobs within the correctional services and facilities management sectors, contributing to the local and national workforce.

Waste & Efficiency Indicators

Waste Risk Score: 50 / 10

Warning Flags

Potential for cost overruns if award fee criteria are not met or if scope creep occurs.
Risk of contractor complacency over a long contract duration, potentially impacting service quality.
Dependence on a single contractor for critical facility operations can create vulnerabilities.
Limited transparency into the specific performance metrics tied to the award fee component.

Positive Signals

The 'FULL AND OPEN COMPETITION' indicates an initial effort to secure the best value through a competitive process.
The 'FIXED PRICE AWARD FEE' structure aims to provide cost certainty while incentivizing contractor performance.
The long contract duration suggests a stable operational environment and a proven track record of the contractor.
The specific NAICS code (561210) for Facilities Support Services indicates a focus on specialized operational expertise.

Sector Analysis

The Facilities Support Services sector (NAICS 561210) encompasses a broad range of services related to the operation and maintenance of buildings and other facilities. This contract falls within the government services segment of this market, where private companies are contracted to manage and operate government-owned or leased facilities. The total federal spending in this sector can be substantial, covering everything from janitorial services to complex facility management for specialized sites like correctional institutions. This contract represents a significant portion of spending for a specific facility within this broader industry.

Small Business Impact

The data indicates that small business set-asides were not utilized for this contract (ss: false, sb: false). This suggests that the primary contract was awarded to a large business, Cornell Companies, Inc. There is no explicit information regarding subcontracting plans or performance. Without this data, it's difficult to assess the direct impact on the small business ecosystem, though typically large prime contracts offer opportunities for small businesses to participate as subcontractors.

Oversight & Accountability

Oversight for this contract would typically fall under the Department of Justice's Bureau of Prisons. Mechanisms would likely include contract performance reviews, financial audits, and site inspections to ensure compliance with the terms and conditions. The 'FIXED PRICE AWARD FEE' structure itself implies a performance monitoring component. Transparency would depend on the public availability of performance reports and audit findings, which are not detailed in the provided data.

Related Government Programs

Federal Prison System Operations
Correctional Facility Management
Government Facilities Maintenance
Private Prison Operations (if applicable)
Department of Justice Contracts

Risk Flags

Long contract duration may lead to complacency or lock-in.
Lack of detail on award fee criteria limits performance assessment.
No explicit mention of small business subcontracting goals.
Potential for cost increases if award fee targets are not met or scope changes.

Frequently Asked Questions

What is this federal contract paying for?

Department of Justice awarded $313.0 million to CORNELL COMPANIES, INC.. CONTRACTOR OWNED AND OPERATED CORRECTIONAL FACILITY

Who is the contractor on this award?

The obligated recipient is CORNELL COMPANIES, INC..

Which agency awarded this contract?

Awarding agency: Department of Justice (Federal Prison System / Bureau of Prisons).

What is the total obligated amount?

The obligated amount is $313.0 million.

What is the period of performance?

Start: 2004-09-24. End: 2016-04-13.

What was the specific performance criteria tied to the 'Award Fee' component of this contract, and how often was the award fee fully or partially granted?

The provided data does not detail the specific performance criteria for the 'Award Fee' component of this contract. Typically, award fees are tied to achieving or exceeding certain performance standards related to operational efficiency, safety, inmate welfare, facility maintenance, and responsiveness. Without access to the contract's statement of work and performance evaluation reports, it's impossible to determine how often the award fee was fully or partially granted. This information would be crucial for assessing the contractor's actual performance and the effectiveness of the incentive structure in driving desired outcomes.

How did the final cost of this contract compare to the initial estimated cost, and were there significant modifications or change orders?

The provided data shows the total obligated amount ('a') as $312,952,412.83, which represents the final value of the contract. However, it does not include information about the initial estimated cost or any details regarding contract modifications, change orders, or budget adjustments that may have occurred during the contract's lifespan from 2004 to 2016. To assess cost performance and potential overruns, a comparison between the initial bid or estimate and the final award amount, along with a review of any contract modifications, would be necessary.

What was the number of bids received during the 'FULL AND OPEN COMPETITION' phase, and what were the key factors in selecting Cornell Companies, Inc. as the sole awardee?

The data indicates the contract was awarded under 'FULL AND OPEN COMPETITION' (ct: FULL AND OPEN COMPETITION), suggesting a broad solicitation. However, the specific number of bids received is not provided. The selection of Cornell Companies, Inc. as the sole awardee would have been based on the evaluation criteria outlined in the solicitation, which typically include factors such as technical approach, past performance, management capability, and price. Without the solicitation documents and the source selection decision, the precise reasons for choosing Cornell Companies, Inc. over other potential bidders remain unknown.

What was the operational history and track record of Cornell Companies, Inc. prior to and during the execution of this contract, particularly concerning facility safety and inmate management?

Cornell Companies, Inc. was a significant operator of correctional facilities prior to and during this contract period. Their track record would encompass their experience in managing similar facilities, their approach to security, inmate rehabilitation programs, and their history of compliance with regulatory standards. Assessing their performance during this specific contract would require reviewing any official reports, audits, or incident logs related to the facility's operations, safety incidents, or inmate grievances. Publicly available information and government oversight reports would be key sources for evaluating their track record.

How does the per-year cost of this contract compare to the average cost of operating similar federal correctional facilities managed by other contractors or government entities?

The contract value of approximately $313 million over roughly 11.5 years equates to an average annual cost of about $27 million. To benchmark this against similar facilities, one would need data on the operating costs of comparable federal correctional institutions, considering factors such as inmate population, security levels, geographic location, and the scope of services provided. Comparing this figure to industry benchmarks for correctional facility management, adjusted for these variables, would reveal whether this contract represented a cost-effective solution for the Department of Justice.

Industry Classification

NAICS: Administrative and Support and Waste Management and Remediation Services › Facilities Support Services › Facilities Support Services

Product/Service Code: RESEARCH AND DEVELOPMENT › DEFENSE (OTHER) R&D

Competition & Pricing

Extent Competed: FULL AND OPEN COMPETITION

Offers Received: 3

Pricing Type: FIXED PRICE AWARD FEE (M)

Contractor Details

Parent Company: THE GEO Group, Inc. (UEI: 612706465)

Address: 1700 WEST LOOP SOUTH, STE 1500, HOUSTON, TX, 77027

Business Categories: Category Business, Not Designated a Small Business

Financial Breakdown

Contract Ceiling: $359,280,457

Exercised Options: $312,952,413

Current Obligation: $312,952,413

Contract Characteristics

Multi-Year Contract: Yes

Commercial Item: COMMERCIAL ITEM PROCEDURES NOT USED

Timeline